Cardano Down 50% In 4 Months: Sellers Unrelenting, Best Time To Buy ADA?
Cardano has been under pressure and selling off in the past four months. From the ADAUSDT daily chart, it is evident that bears have been in control. After peaking in March, prices plunged by as much as 60% before finding support in mid-July.
Since then, ADA has recovered slightly, but bears have not relentred, especially this week. So far, ADA is still 50% after the spike in March. This set of conditions could explain traders bearish stance on multiple perpetual trading platforms like Binance and OKX.
The slip in ADA prices and the alignment of the trend to be bearish from March explain why the funding rate is negative and continues to increase.
Time To Buy ADA Despite Extremely High Negative Funding Rates?
Even so, not everyone is extremely bearish. Santiment analysts note that despite this state of affairs, ADA prices could, if anything, recover unexpectedly. They explained that the recent spike in negative funding rates, pointing to heightened selling activity, could offer a contrarian opportunity for aggressive traders.
Historically, Santiment analysts explained that prices tend to recover sharply in the sessions ahead whenever an asset is extremely sold, as is the case with ADA. Rapidly expanding prices tend to trigger a short squeeze, forcing sellers to buy at a higher price and fanning the uptrend.
Nonetheless, this is not always the case, and this contrarian strategy should be taken cautiously. When a given asset is perceived as extremely oversold, prices can often dip even as analysts expect a recovery.
This may mean traders are unconvinced that the asset has what it takes to recover in the wave of intense selling pressure. In this case, traders have to stay safe and align with the primary trendbearish.
Cardano Whales Staying Away Ahead Of The Chang Hard Fork
So far, parallel data from IntoTheBlock points to waning investor confidence. According to data, there has been a drop in whale inflow, a dent to the expected optimism. Still, this can be attributed to portfolio rebalancing that might impact inflows, among other factors.
It remains to be seen how ADA will perform in the coming days. The Cardano development team is preparing for the Chang hard fork, which is set to conclude by the end of July.
This upgrade will decentralize the smart contracts platform by introducing elected delegate representatives tasked with shaping the Cardano constitution. The successful implementation of Chang will usher in the final development phase of Cardano, Voltaire. In turn, this effectively decentralized the network, similar to Ethereum.
Read more: https://www.newsbtc.com/news/cardano/cardano-down-sellers-unrelenting-best-time-to-buy-ada/
Text source: NewsBTC
